Sebi slashes 'additional commission' sops for mutual fund industry

The move could pose a challenge for the industry as the assets garnered from B30 cities currently account for only a minuscule portion of the overall industry assets

Even before the Rs 21 trillion mutual fund (MF) industry could digest the higher tax burden of the Union Budget, the industry has received another blow. Market regulator Securities and Exchange Board of India (Sebi) has slashed the sops it allows for the industry in the form of additional commissions.

Sebi has removed the additional total expense ratio (TER) of 30 basis points (bps) on incremental flows from so-called beyond 15 cities (B15). Instead, the regulator said the extra expenses will now be allowed from flows coming from beyond 30 cities (B30).

“The additional TER for inflows from  B15 cities was allowed with an objective